The Indian market opened higher note and saw good buying in afternoon session and close with hand some gains. For coming session we can see nifty testing 2970 -3067 levels on the other side 2870 -2840 will act as support zone .For any long 2870 will act as stop lossBefore market open have a glance
Outlook for this week 16/02/09 to 20/02/09
Nifty Future Hourly Chart
CMP : 2935
Buy Above 2970 : Target 3020, 3095
Sell Below 2910: Target 2720, 2650
SBIN Future
CMP : 1179
Buy Above : 1200
Target 1235, 1280
Sell Below : 1160
Target 1115, 1080
RIL Future
CMP : 1394
Buy Above : 1420
Target 1460, 1500
Sell Below : 1375
Target 1340, 1300
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Watch : +Ve Stocks for this Week
ABAN : CMP 455.90
Buy Above :468 Target 500, 550
Sell Below:445 Target 425, 405
ALPHAGEO: CMP 107.40
Buy Above :113 Target 125, 133
Sell Below:103 Target 96, 90
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Long Term, U can use for SIP plan
L & T, SBI, RIL, HDFC, MARUTI
A reader asked me to look at India’s Stock Exchange (”Nifty”) and I’m seeing an interesting potential Elliott Wave Count that may be setting up clearer than the S&P 500 Index. Let’s see the Weekly and Daily Structure.
India’s Stock Exchange (S&P CNX “Nifty” Index - $CNXN) Weekly:
I’m not an expert at India’s Stock Exchange, but let’s see what the charts might be hinting to us.
Clearly, we’re in a downtrend and the moving averages have just crossed into the most bearish orientation possible. Price is beneath all of them and we’re coming off a New Momentum Low that formed in October. Price retraced back to the falling 20 week EMA (fell just shy of it) and appears to be inflecting downward to make possible new lows. The entire bearish analysis will be invalidated if we get a move up here to close above 3,200, which would invalidate the Elliott Wave Count and also break above the falling 20 week EMA.
Speaking of Elliott Wave, the easiest count I have us here is in the final 5th Wave of the massive 3rd Wave Down. Officially, I have us ready to begin the third wave of the 5th wave. I’ve drawn a possible pathway price might take (which again will be invalidated with a close above 3,200).
Look closely at the Wave Count to see if you have a different interpretation you would like to share. I have the 3rd Wave Sub-dividing into its own large-scale 5 wave pattern, and if that is correct, then we’re missing the Final Fifth Wave to complete the pattern. Afterwards, we would expect a large-scale “ABC” circled 4th Wave (major) to take us back to 3,500 or perhaps 4,000.
Let’s drop to the Daily Chart to see this massive potential 3rd wave in action.
India’s Stock Exchange (S&P CNX “Nifty” Index - $CNXN) Daily:
If you don’t understand Elliott Wave, side-step the numbering to look at the orientation of price to the key moving averages and what happened in the past when price formed Divergences (or other momentum readings).
I have the Corrective 4th Wave completing in January as price formed a “Bull Trap” (at the same time the S&P 500 did so) before price began its descent into February. Price has actually shown relative strength to the S&P 500. I have us forming a triangle on the momentum oscillator and - in terms of Elliott - completing the c Wave of 2 which means - if this is correct - then we’ll soon be breaking down from these levels.
One force counter-acting that currently is the EMA structure - which is actually in the most bearish orientation possible, though price is currently supporting above these averages. Watch this closely for additional clues.
A second way to interpret the Elliott Count would be to place the entire structure (after Wave 3) into an ABCDE Triangle, with the November high = A; Nov Low = B; January high = C; January Low = D; and current price = E. If this is the dominant count, then it would imply a downside break is imminent to plunge us into the first wave of the final 5-wave structure down. This also would be invalidated with a close above 3,200.
If you have further interest, watch this chart closely to see if we break to the upside… but if we break down from here, we’ll know the Elliott Count and resolution is the most likely outcome of the current structure, which would mean new lows will be realized likely in March. Same goes for the US S&P 500 as well.
-Corey Rosenbloom
The government gave gas-based urea manufacturing plants the top most priority in allocating the initial 40 million standard cubic meters per day output expected from Reliance's KG-D6 fields. NFCL and GVK power along with Lanco Power (subsidiary of Lanco infra) are the biggest beneficiaries in the initial stage of gas distribution.
Who will benefit from Reliance Gas?
1. Fertiliser companies: Nagarjuna Fertilisers, Tata Chemicals, Chambal Fertilisers, GSFC, Indo Gulf, IFFCO and RFCL are the biggest beneficiaries.
2. Power companies: GVK Power, Lanco Power and NTPC.
3. Transporters of Gas: Reliance, GAIL and Gujarat State Petronet.
Satyam sale news:
Satyam Board is trying to get a price of Rs 5,000 crore for scam hit company. It translates into a price of Rs 50-60 per share. Satyam is currently trading around Rs 43. In the auction, I will not be surprised if price per share reaches even beyond 70 levels. Spice group is expected to participate aggressively in the auction. Who are the competitors? Will Larsen and Toubro waste money by participating in the auction?
Those who want to acquire the company need to buy 51% stake to get a controlling interest. Larsen and Toubro already had 12% stake in the Company. Spice and Hinduja groups are also showing interest to buy Satyam Computers. Speed of the sale process will determine the interest of the participants.
Satyam board will outline bidding process for company sale in the next 7-10 days. I don’t know how anyone can sell/buy a company without restatement of accounts. I don’t know why these buyers are so eager to purchase a company which is neck deep in law suits and without knowing about much about books. We may get a clear picture once they reveal facts like number of clients left and who will bear legal costs etc.
Pros: Clients, Employees and established relationships. Satyam is expected to receive Rs 5,000-7,000 crore receivables from clients in the next 1 year.
Cons: Legal problems, loss of clients, IT slowdown and bad books. Legal suits will alone cost Rs 2,000-3,500 crore.
We will get more idea on the company when books will be restated by Deliotte and KPMG (in late March). It means those who are now interested in the Satyam are taking a “bold gamble”.
Satyam value in May, 2008: Rs 35,000 crore.
Satyam value in February, 2009, 2008: Rs 800 crore.
No one knows real value the company. Everyone is taking a gamble without knowing anything about books. Strange situation! Good thing is Satyam Computers would be sold as a whole and not in parts.
Positive Stock Market News:
1. Bartronics India:
2. Reliance Infra announced another buy back plan. Promoters seem to have interested in increasing their stake from current 33%.
3. Alfa Laval: Foreign promoters increased stake in the company from 77% to 89% through open offer. They may delist shares of the company by further raising the stake beyond the SEBI-stipulated limit of 90% through book-building process.
4. NTPC signed a memorandum of understanding (MoU) with NPCIL.
Statements of the day:
1. Barack Obama on American credit crisis:
"American economic recovery will take years but not months. Passing this stimulus plan is a critical step, but as important as it is, it's only the beginning of what I think all of you understand is going to be a long and difficult process of turning our economy around. To truly address this crisis, we will also need to address the crisis in our financial sector to get credit flowing again to families and businesses. We need to confront the crisis in the housing sector that's been one of the sources of our economic challenges. "Comprehensive financial reform" in the way government relates to financial markets to deal with the complex challenges of the 21st century is need of the hour to ensure that a crisis like this can never happen again".
2. Warren Buffett: USA is now in “Economic Pearl harbour” but economic situation is not as bad at World War II or the Great Depression, but it's still pretty severe.
3. NASSCOM: H1B visa restrictions will have no impact on Indian IT industry. In October, 2008 – credit crisis will have no impact on Indian IT. In December, 2008 – US Recession will have no significant impact on Indian IT. According to NASSCOM people, no event will have any impact on Indian IT. People like Chidambaram and associations like NASSOCM are becoming fools in the eyes of investors by issuing careless statements.
Interesting fact: US Federal Reserve Chairman Ben Bernanke’s childhood home sold after foreclosure.
Fiscal Deficit-future problem:
Barack Obama got approval for $787 billion stimulus package. But US Fiscal deficit is now expected to reach 12-14% GDP – almost $2 trillion deficit. It will become another headache for American President in the coming days. He is expected to announce more populist measures on health care and education etc which will further deteriorate the fiscal deficit.
Latest Pledged shares news:
1. Max India promoters pledged 25% of insurance company stake. Promoters used it for real estate purchases and to buy shares of another company. Danger signals!
2. Suzlon Energy promoters pledged 26% stake of the wind energy company. Promoters pledged most of their stake as collateral security to get loans.
3. Aurobindo Pharma promoters pledged 39% stake of the company. It is now an easy takeover target.
4. Reliance Capital promoters pledged 4% stake of the company while promoters have not pledged any shares in RNRL and Reliance Power.
5. Promoters of Parsvnath pledged 64% stake of the real estate company. Promoters are in serious trouble. Promoters used shares as security to get loans.
6. Akruti City promoters pledged 13.5% stake of the company.
7. Promoters of Mukand pledged 27% stake of the company while Promoters of Jindal worldwide pledged 15.5% stake of the company.
8. GATI promoters pledged 8% stake of the company while Promoters S Kumars pledged 36% stake of the company.
9. Essel propack promoters pledged 31% stake of the company. Promoters of Escorts pledged 21.5% stake of the company.
10. Mahindra and Mahindra promoters pledged 8% stake of the company. Promoters used the money to buy the company shares in secondary market. That is called transparency and right intentions.
11. Tulip Telecom promoters pledged 22.5% stake of the company while Motilal Oswal promoters pledged 12.3% stake of the company.
12. JP Associates promoters pledged 2% stake of the company. JP Hydro promoters pledged 60% stake of the company.
Click here to know more about pledged shares by Indian promoters.
Recession news:
1. Europe: Car sales are now at 20-year low.
2. USA: Another 4 banks closed the shop.
Total bank failures in 2009: 13
Total bank failures in 2008: 25
Total bank failures in 2007: 3.
Must read articles:
1. Which sectors and stocks performed well during Great Depression?
2. Comparison of current recession with previous ones.
Market may open up. Market would be volatile . Market may up between 10.30 and 11.01 Market may steady or up side between 13.01 and 13.24. Market may close at up or near to previous closing.
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Opening Bell Call
Buy
CIPLA - Cipla Ltd
IDEA - Idea Cellular Limited
ONGC - Oil & Natural Gas Corpn Ltd
TATAPOWER - Tata Power Co. Ltd.
BALRAMCHIN - Balrampur Chini Mills Ltd
On 13th February 2009 - The BSE Sensex closed at 9634 (Up 168 points) while the NSE Nifty closed at 2948 (Up 55 points).
Opening Bell Call
Sell
AXISBANK - Axis Bank Limited
BANKINDIA - Bank of India
ABIRLANUVO - Aditya Birla Nuvo Limited
HDFC - Housing Development Finance Corporation Ltd.
IDBI - IDBI Bank Limited
Technical Analysis for 16th February 2009
BSE-SENSEX - Major Support - 9624, 9618, 9613, 9649, 9684, 9679, 9673, 9668
BSE-SENSEX - Major Resistance - 9588, 9552, 9557, 9563, 9527, 9491, 9455, 9419
NSE-NIFTY - Major Support - 2938, 2923, 2907, 2887, 2866, 2851, 2835, 2820
NSE-NIFTY - Major Resistance - 2959, 2979, 2995, 3010, 3031, 3051, 3072, 3092
Reliance makes a move outside the congestion zone on this weekly chart. The resistive trendline drawn from the January low meets somewhere around 1700~ on the price axis. If this uptrend continues then this can be the target for Reliance.
m&m
satyamcomp
idbi
nagarjunaconst
rcom:positive bias.
ranbaxy:negative bias.
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